by
Chris Harman
President
Harman Stone Corporation
In July of 2019, the tragic nexus of violence in the workplace and Workers Comp Claims – once a nearly unthinkable combination – became more commonplace. And our national culture suddenly reverberated like the shots that shattered the air in a Southaven, Mississippi Walmart.
Just minutes later, when the sounds faded, two store associates lay fatally shot, a Southaven Police officer was down but alive thanks to his ballistic vest, and the alleged shooter had been immobilized by two shots from another responding Southaven officer.
It was only 6:36 a.m. on a peaceful Southern midsummer morning.
Two weeks before the chaos unfolded, Southaven Police Department Deputy Chief Mark Little says officers were already thinking about the potential for an active shooter and had conducted joint training exercises with Southaven Fire Department responders. “You hope it never happens for us, but you have to prepare for it,” he said.
Small business owners can nod in agreement, as they think about their workplaces and the potential for violence and injury in them. But sadly, hope is not a plan.
Cultural Shifts in America
Anyone can see via mainstream media, social media like Facebook, Twitter and others, that there is a devolution of social civility happening in real time in our nation. Anger management is barely more than a now-syndicated TV series title; it exists as a concept only in the most responsible households and social groups. From coast to coast and even in the “heartland”, conflict management is becoming a nearly lost moral and behavioral construct. Society suffers, and with it, the once-benign refuge of “the workplace” as well.
This cultural shift spells trouble for small and large employers alike. In the past five years alone, news consumers can remember stabbings, shootings, fisticuff brawls and all manner of other violence occurring between workplace associates, between associates and customers, and even some involving business owners or managers and disgruntled or mentally unstable former associates bent on settling a score.
Not surprisingly, with more relatively unskilled to moderately skilled workers thrown into customer service roles, customer service is one of the top 5 avocations with the highest risk of workplace violence. Others include delivery drivers, healthcare workers, service workers and technicians; even law enforcement. (OSHA and other sources.) It happens far more often than many think.
OSHA estimates close to 2 million people experience violence at work each year, most often at the hands of co-workers. “We know it’s at least (2 million) but the true figure is somewhere north of that number,” said Kathleen Bonczyk, Executive Director of the Workplace Violence Prevention Institute. Reason: Many experts feel workplace violence often is under-reported or simply goes unreported. The smaller the business, the less likely the chance of the stats becoming part of the bigger picture. Bonczyk, the author of The Killer in the Next Cubicle, says vetting prospective employees before they are even hired is part of the violence prevention playbook. Small business employers, though, are far less likely to really check out prospects before they become new hires. And that is proven to be a costly omission. Workplace violence, according to recent OSHA data, is the 4th leading cause of workplace fatalities. Without proper insurance between the business owner and the plaintiff in a workplace violence or, even more devastatingly, a violence-related workplace death, a business may become torn apart and even entirely liquidated. With it, in the most extreme circumstances, may go the hopes, dreams and assets of ownership and family.
What, Exactly, is Workplace Violence, and What are the Warning Signs of Risks?
According to SHRM, an industry association focused on HR management issues, about 36% of all companies surveyed reported incidents of workplace violence… in 2013. More recent studies — and the cultural shift addressed above –point to a probable 45% reporting rate. Remember: Reporting rate and incident rate are most likely separated a bit, with true incident rate being higher.
But, how do insurers and regulators define “Workplace Violence”?
SHRM, using OSHA guidelines, defines it as “a spectrum of behavior — including overt acts of violence, threats and other conduct – that generates a reasonable concern for safety from violence, where a nexus exists between the behavior and the physical safety of employees and others (such as customers, clients and business associates), on-site or off-site, when related to the organization.”
The four types of risk, according to HR Daily Advisor, a trusted HR industry publication, are pretty straightforward: (1) Criminal Intent, including robbery, shoplifting, trespass and terrorism; (2) Customer or Client, in which the perpetrator has a legitimate relationship with the business and becomes violent while being served by the business; (3) Worker – on – Worker, including past workers who attack or threaten current workers; and (4) Personal Relationships, in which the perpetrator doesn’t have a relationship with the business (very common in small, outside-metro area employment situations) but with a current worker.
How does a small business employer calculate risk?
First, screening and hiring practices must be considered, no matter how small the company…even down to 25 or even fewer employees. Second, once employed, every worker needs oversight and non-intrusive observation – difficult but necessary in a small business environment. What is the observation focused on?
A change in behavior patterns. A noted observation of frequency of behavior patterns that are disruptive to the work environment. And last, a reasonable determination of how many behaviors are in the mix?
The serious warning signs can include:
• Crying, sulking or temper tantrums at work;
• Time and attendance problems, consistently observed;
• Disregard for others’ boundaries of safety, or conduct that pushes limits;
• Disdain for authority in the workplace or reporting hierarchy;
• Declining work quality or consistently increasing errors;
• Refusal to acknowledge job performance problems;
• Inexplicably poor decision making;
• “Testing limits” in policy for no constructive reason;
• Profanity, verbal outbursts, particularly those which are disruptive; and
• Poor or self-absorbed response to legitimately critical job reviews.
If you see or are aware of the signs above, take action. Be confident you are insured. If you are not, read on. It doesn’t have to be that way. But brace for the next statistic, because it is a wake-up call for some.
No Workers Comp Coverage? Very Risky.
One out of four small business owners in a 2018 survey conducted by Mantra, admitted that they did not have workers compensation insurance, according to writer Alicja Grzadkowska. Stunningly, among 900 small business respondents, one out of 3 said they weren’t even sure whether they were required in their respective states, or according to their size, whether they were required to cover their employees at all. Company size, the author noted, does not translate to an increased or decreased risk. In fact, one might reasonably suggest, the smaller the company and the looser the screening and hiring process and policies (if any), the greater the likelihood that a loose cannon can do devastating damage once in the workplace.
Size matters. In risk prevention through a well-thought-out set of screening and hiring procedures, and in capacity to mitigate the risk through insurance, the larger the company, the more likely it is to be able to sustain a catastrophic event. But that process, large or small, begins with a well-thought-out policy, and extends to steps along the way, documented and consistently applied.
Certainly, if an owner wears many “hats” in the small business, it affects the exposure to workers comp risk, by impeding and thereby affecting the scrutiny of the factors that contribute to the risk. Too many targets, too few eyes.
Do you know your state’s laws regarding workers comp insurance, and whether you’re required to carry it? Does your employment vary seasonally and put you in a “gap” at times, between mandated numbers and a “no mandate” category? Think about it, then absorb this:
The Costs of Workplace Injuries Are Staggering.
Liberty Mutual, a high bastion of insurance coverage and related data, recently published a 2019 Index, and the data it contains might set you on your heels.
Workplace injuries probably cost US companies, large and small business employers combined, more than $1 Billion per week. The Index lists the top 10 causes of serious workplace injuries; the stats deal with injuries that cause a worker, for various reasons, to miss more than five days or work, and ranks them by their direct costs to employers. Additionally and more interestingly, the Index covers 8 industries and is the first, so far, to report the causes and costs to employers for serious workplace injuries.
If your small business is engaged in one of the following 8 business categories, know this: The business categories account for the most significant percentage of all workplace injuries, and most probably, about 63% of claims. The remaining 37% are probably not documented in insurance records… because they are most likely made in civil litigation, against uninsured employers, and often with devastating results. Your small business is at stake.
The categories are:
• Manufacturing
• Healthcare
• Construction
• Professional Services
• Retail
• Wholesale
• Transportation and Warehousing
• Leisure and Hospitality
It is very important to annually review your current commercial insurance programs, including your Commercial General Liability insurance, Workers’ Compensation insurance and Excess Liability insurance.
However, in addition to those very important coverages, there are also Active Shooter / Assailant / Workplace Violence insurance programs available. These programs offer additional specific coverage for physical and property damage from an incident. They also cover liability resulting from issues involving “duty of care” obligations, business interruption claims involving denial of access and/or loss of physical property.
Often these plans also provide “Public Relations” coverage for crisis management – dealing with the press, families involved, etc. Additionally, there may be coverage for medical and death benefits resulting from an incident, as well as post trauma counseling. Finally, there is often coverage for “Loss of Brand / Reputation” losses.
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